StockTrader
23 years ago
Tuesday April 16, 9:02 am Eastern Time
Press Release
SOURCE: Alliance Gaming Corp.
Alliance Gaming, Harrah's Entertainment Team Up on Record Systems Conversion; All 25 Harrah's Properties Now Run SDS(R)
LAS VEGAS, April 16 /PRNewswire-FirstCall/ -- Alliance Gaming Corp. (Nasdaq: ALLY - news) announced today that its slot accounting system partnership with Harrah's Entertainment, Inc. (NYSE: HET - news) has reached a new level of cooperation with a record conversion at Showboat Atlantic City, the last of 25 properties owned or managed by Harrah's to install SDS from the Company's Bally Gaming and Systems business unit.
The SDS installation team from Bally Systems and Harrah's displaced the old system at Showboat Atlantic City and installed SDS on 3,600 slot machines in 59 days, a record installation time for a casino of this size. The final phase of the conversion lasted an unprecedented 10 days.
A systems installation typically involves both hardware and software in each slot machine, a variety of back-end equipment and a thorough testing cycle. An installation for a casino of Showboat's size typically takes 90-120 days. Averaging more than 400 machines per day, the SDS installation was the largest slot-machine conversion project in Harrah's history.
``The team that Harrah's rallied together to make the Showboat installation happen was truly remarkable,' said Bill Watson, Senior Vice President and General Manager of Bally Systems. ``And I believe our team also showed why Bally Systems is the number one slot accounting system provider to the gaming industry.'
``We were able to accomplish the conversion with virtually no disruption to customer service and no appreciable impact to revenue generation at the Showboat,' said Tom O'Donnell, Senior Vice President and General Manager of the Showboat.
In a systems relationship between Harrah's and Bally Systems dating back to 1988, the Showboat installation also marked another milestone as the final Harrah's property to install SDS, which now links more than 42,000 machines at Harrah's properties. Harrah's is now the only major casino corporation in the world to enjoy the technology and efficiency benefits of a single slot data system solution.
``We value our relationship and partnership with Harrah's Entertainment throughout all levels of Bally Gaming and Systems,' said Robert Miodunski, President and Chief Executive Officer of Alliance Gaming. ``As a true technology innovator in the gaming industry, Harrah's has proven to be a valuable collaborative partner as we work together to help define the slot floor of the future.'
SDS technology is an integral part of Harrah's core capabilities, which include the Total Rewards database, the customer-relationship management system and company-wide daily slot-performance analysis.
``This is a tremendous milestone for Harrah's,' said John M. Boushy, Harrah's Entertainment's Senior Vice President, Operations, Products and Services and Chief Information Officer. ``The unprecedented convergence of our slot machines into a single analytical tool provides us with a unique and comprehensive view of our national slot inventory and slot floors almost instantaneously.
``Prior data system conversions have led to sound improvements in operations, marketing and financial performance,' Boushy continued. ``With SDS fully operational at our 25 properties, we expect to see continual improvement in these areas as a result of the capabilities built into and around the system.'
Alliance Gaming is a diversified gaming company with headquarters in Las Vegas. The company is engaged in the design, manufacture, distribution and operation of advanced gaming devices and systems worldwide, is the nation's largest gaming machine route operator, and operates two casinos. Additional information about the company can be found on the Alliance Gaming web site at www.ally.com .
Founded in 1937, Harrah's Entertainment, Inc. is the most recognized and respected name in the casino-entertainment industry, operating 25 casinos in the United States, primarily under the Harrah's brand name. Harrah's Entertainment is focused on building loyalty and value with its target customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership. More information about Harrah's Entertainment is available on the company's web site, www.harrahs.com .
This news release may contain ``forward-looking' statements within the meaning of the Securities Act of 1933, as amended, and is subject to the safe harbor created thereby. Such information involves important risks and uncertainties that could significantly affect the results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements. Future operating results may be adversely affected as a result of a number of risks detailed from time to time in the company's filings with the Securities and Exchange Commission.
For further information, please contact: investors and media, Robert L. Saxton of Alliance Gaming Corp., +1-702-270-7600.
SOURCE: Alliance Gaming Corp.
StockTrader
23 years ago
Alliance Gaming Reports Record Quarterly Results; Increases Fiscal 2002 Guidance; Provides First Guidance for Fiscal 2003
19:25 EDT Wednesday, April 10, 2002
LAS VEGAS, April 10 /PRNewswire-FirstCall/ -- Alliance Gaming Corporation (Nasdaq: ALLY) today announced a 133% increase in earnings to a record $15.9 million, or $0.32 per diluted share ($0.64 on a pre-split basis) for its third fiscal quarter ending March 31, 2002. For the comparable quarter ended March 31, 2001, the Company reported earnings of $6.8 million, or $0.16 per diluted share.
Results for the March 2002 quarter include:
-- Record consolidated revenues of $154.8 million, an increase of 12% from
the $138.5 million in the prior year quarter. Contributing to this
increase was a 39% increase in revenues at the Bally Gaming and Systems
business unit.
-- Record consolidated EBITDA of $32.8 million, an increase of 41% from
the $23.2 million in the prior year quarter. This increase was led by
a 115% increase in EBITDA at Bally Gaming and Systems.
-- Record consolidated operating income grew 53% to $24.7 million compared
to $16.1 million in the prior year quarter.
-- The Company now has net positive shareholders' equity (book value) for
the first time since the acquisition of Bally Gaming International,
Inc. in 1996.
Fiscal Year 2002 Updated Guidance
-- For the fiscal year ended June 30, 2002, before the effect of a
potential one-time tax benefit, the Company expects to report earnings
in the range of $1.00 to $1.03 per diluted share based on 48 million
weighted average shares outstanding for the year (or $2.00 to $2.06
pre-split). These earnings do not reflect any Federal income taxes as
the earnings were offset against net operating loss (NOL) carry
forwards. Revenues are expected to exceed $590 million and EBITDA is
expected to exceed $108 million.
-- At June 30, 2002, the Company expects to record a one-time tax benefit
in the range of $32 million to $36 million, or $0.64 to $0.72 per
share. This non-cash item would result from a reduction of previously
recorded valuation reserves against net deferred tax assets, primarily
NOLs, which would be realizable as a result of the Company's current
and projected levels of taxable income.
Fiscal Year 2003 Guidance
-- For fiscal 2003, the Company expects earnings per share of at least
$0.82 on 50 million shares outstanding, reflecting the impact of
Federal income tax expense after several years of generating NOL carry
forwards. The fiscal 2003 guidance reflects an increase in earnings
per share compared to $0.66 to $0.68 (or $1.00 to $1.03 pretax) in
fiscal 2002 as if such earnings reflected Federal income tax expense.
Consolidated net interest expense for the current quarter totaled $6.5 million compared to $8.4 million in the prior year period, resulting from substantially lower interest rates on the Company's term loan facility.
The Company recorded an income tax provision of $0.9 million in the current quarter compared to $0.1 million in the prior year quarter. The current quarter tax provision represents primarily estimated state income taxes and a $0.5 million provision for German income taxes. Federal taxable income for the period has been completely offset against net operating loss (NOL) carry-forwards.
As of March 31, 2002, the Company had $49.0 million of cash and cash equivalents, of which approximately $23.7 million was held for operational purposes vaults, cages and change banks and $7.7 million was held in restricted jackpot reserve accounts.
For the current quarter, consolidated capital expenditures, including costs for proprietary games, totaled $10.6 million and compared to $6.7 million for the prior year period. The increase was primarily driven by the continued deployment of wide-area progressive games. Additionally, the Company paid approximately $8.5 million, net of cash received, for the acquisition of ACSC.
Effective July 1, 2001, the Company elected to adopt the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", whereby amortization of goodwill ceased, increasing earnings per share for the quarter by less than $0.01.
The Company will hold its conference call on Thursday, April 11th at 10 a.m. PDT (1 p.m. EDT). The Company will broadcast the conference call over the Internet. All interested parties are asked to log on to the call at www.ally.com using the Investor Relations tab 10 minutes prior to the start of the call.
EBITDA Summary
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the Company's business units are as follows (Dollars in millions):
EBITDA Summary
Three Months Ended Nine Months Ended
March 31, March 31,
2002 2001 2002 2001
Bally Gaming and Systems $16.4 $7.7 $40.7 $24.2
Route Operations 7.6 6.2 20.8 18.1
Casino Operations 7.0 8.1 19.1 20.9
Bally Wulff 4.5 3.9 10.2 9.3
Corporate office expense (2.7) (2.7) (7.7) (7.8)
Alliance total EBITDA $32.8 $23.2 $83.1 $64.7
Bally Gaming and Systems Revenues Increases 39%, EBITDA Increases 115%
The following chart summarizes the financial information for the Bally Gaming and Systems business unit (Dollars in millions):
Three Months Ended Nine Months Ended
March 31, March 31,
2002 2001 2002 2001
Revenues
Game sales $24.5 $23.8 $72.4 $62.0
System sales 18.9 11.0 43.5 31.7
Gaming operations 14.1 6.6 38.4 19.9
Total revenues $57.5 $41.4 $154.3 $113.6
Gross Margin % 58% 48% 57% 52%
EBITDA $16.4 $7.7 $40.7 $24.2
EBITDA Margin 28.6% 18.5% 26.4% 21.3%
Operating Income $13.6 $5.4 $33.6 $17.8
New Gaming Devices Sold 3,025 2,700 8,770 7,400
Game Monitoring Units Sold 13,675 8,300 31,250 22,800
End of period installed
base of WAP and daily-fee
games 3,740 2,670 3,740 2,670
Average Installed base
of WAP
And daily-fee games 3,700 2,645 3,550 2,700
Bally Gaming and Systems business unit reported a 39% increase in revenues over the prior year's quarter. Revenues from sales of gaming devices increased 3% over the prior year's quarter primarily as a result of a 12% increase in the number of units sold and a slightly lower average selling price. Bally Systems revenues increased 72% over the prior year quarter primarily as a result of continued strength in new system installations and higher levels of recurring hardware and software support revenues resulting from the larger base of installed systems. Gaming Operations revenues increased 112% over the prior year's quarter as a result of a 41% increase in the installed base of wide-area progressive (WAP) and daily-fee games deployed, which now total 2,440 and 1,300, respectively. During the quarter we deployed an additional 470 WAP and daily-fee games, led by the installation of 270 Popeye(R) units.
The Bally Gaming and Systems EBITDA improved 115% to $16.4 million, which is a new record for this business unit, compared to $7.7 million in the comparative prior year period. This increase resulted from the above mentioned improvements in revenues and margins driven by the larger proportion of high margin gaming operations revenues.
On March 19, 2002, the Company completed the acquisition of Advance Casino Systems Corporation (ACSC), a provider of hotel and casino management systems, which is included in the reported results for Bally Gaming and Systems.
Route Operations Revenues Increase 3%, EBITDA Increases 22%
The following chart summarizes the combined financial information for the Nevada route operations and the Louisiana-based Video Services, Inc. operations (Dollars in millions):
Three Months Ended Nine Months Ended
March 31, March 31,
2002 2001 2002 2001
Revenues
Nevada $53.6 $52.0 $156.1 $150.4
Louisiana 4.2 4.4 11.2 12.8
Total revenues 57.8 56.4 167.3 163.2
EBITDA
Nevada 6.8 5.4 18.9 15.7
Louisiana 0.8 0.8 1.9 2.4
Total EBITDA 7.6 6.2 20.8 18.1
EBITDA Margin
Nevada 13% 10% 12% 10%
Louisiana 19% 18% 17% 19%
Operating Income $4.6 $3.7 $11.8 $11.2
Average Number of
Gaming Devices
Nevada 8,240 8,180 8,260 8,060
Louisiana 730 680 690 680
Total Gaming Devices 8,970 8,860 8,950 8,740
For the Nevada route operations, EBITDA increased $1.4 million, or 25%, compared to the prior year quarter. Net win per day per gaming machine increased 1% to $70.50 in the current quarter compared to $70.20 in the prior year quarter, and the average number of gaming machines deployed increased 1% over the prior year quarter. At March 31, 2002, the Gamblers Bonus product was available at 390 locations and was installed in over 3,980 gaming machines or 48% of the Nevada route's total installed base of gaming machines.
The decrease in revenues at VSI is due primarily to a 10% decrease in net win per day per gaming machine to $63.40 from $70.30 in the prior year quarter offset by a 7% increase in the number of units deployed which resulted from the opening of one new OTB with 70 games. The addition of the one new location helped VSI reverse several quarters of year-over-year declines in EBITDA, however this market remains very competitive given the number of truck stop casinos in the metro New Orleans area.
Casino Operations Reports 6% Decrease in Revenues, 14% Decrease in EBITDA
The following chart summarizes combined financial information for the Rainbow Casino in Vicksburg, Mississippi, and the Rail City Casino in Sparks, Nevada (Dollars in millions):
Three Months Ended Nine Months Ended
March 31, March 31,
2002 2001 2002 2001
Revenues
Rainbow Casino $13.9 $15.2 $39.8 $41.0
Rail City Casino 5.1 5.0 15.0 14.1
Total Revenues 19.0 20.2 54.8 55.1
EBITDA
Rainbow Casino 5.6 6.7 15.0 17.1
Rail City Casino 1.4 1.4 4.1 3.8
Total EBITDA 7.0 8.1 19.1 20.9
EBITDA Margin
Rainbow Casino 40% 44% 38% 42%
Rail City Casino 28% 28% 28% 27%
Operating Income $6.4 $7.5 $17.6 $19.2
Average Number of
Gaming Devices
Rainbow Casino 975 935 945 960
Rail City Casino 530 510 525 495
Total Gaming Devices 1,505 1,445 1,470 1,455
Average Number of
Table Games 24 26 24 23
The Casino Operations business unit reported a 6% decrease in revenues and 14% decrease in EBITDA. Rainbow Casino reported an 8% decrease in revenues and 17% decrease in EBITDA. This declined is a result of the significant competitive pressure we face in a market which is growing at less than its historical norm. We intend to aggressively gain an increase in market share in this market through a combination of enhanced marketing programs and certain improvements to the facility. Rail City reported a 2% increase in revenues and EBITDA grew by 3%, driven by an increase in slot win of 4%.
Wall Machines and Amusement Games Reports Flat Revenues, 13% Increase in EBITDA
The following chart summarizes the financial results for the Wall Machines and Amusement Games business unit, which is based in Germany (Dollars in millions):
Three Months Ended Nine Months Ended
March 31, March 31,
2002 2001 2002 2001
Revenues $20.5 $20.5 $58.7 $56.0
Gross Margin % 53% 47% 49% 46%
EBITDA $4.5 $3.9 $10.2 $9.3
EBITDA Margin 22% 19% 17% 17%
Operating Income $3.2 $2.6 $6.3 $5.2
Number of New Wall
Machines Sold 2,320 3,650 8,130 9,900
Number of New Wall
Machines Leased 1,760 1,020 4,370 2,900
Installed Base of
Leased Machines 7,620 5,960 7,620 5,960
Wall Machines and Amusement Games business unit revenues were flat as a result of a 37% decrease in new units sold offset by 12% increase in the average selling price and a 20% increase in revenues from leased games. The conversion to the Euro currency has now been completed, and the sale of Euro dominated games and conversion kits had a positive impact on the current quarter. Consistent with the current quarter, we believe it is likely that customers will continue to migrate to leasing games versus the purchase of machines, which should further grow our base of recurring rental revenues.
The disclosures herein include statements that are "forward looking" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, and are subject to the safe harbor created thereby. Such forward looking information involves important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward looking statements made by or on behalf of the Company. Future operating results may be adversely affected as a result of a number of factors enumerated in the Company's public reports and prospectuses such as the impact of competition, uncertainties concerning such matters as competition, product development, customer financing, sales to non-traditional gaming markets, foreign operations, dependence on key personnel, strict regulation by gaming authorities, gaming taxes and value added taxes, change in control, and other risk factors listed from time to time in the Company's SEC reports, including but not limited to the most recent reports on Form 10-K and 10-Q.
Alliance Gaming Corporation is a diversified gaming company headquartered in Las Vegas, Nevada. The Company is engaged in the design, manufacture, operation and distribution of advanced gaming devices and systems worldwide and is the nation's largest gaming machine route operator and operates two casinos. Additional information about the Company can be found on the Alliance Gaming web site at: www.ally.com .
Popeye(R) (C)2001 King Features Syndicate, Inc/(TM)Hearst Holdings, Inc.
For further information, please contact Investor and Media, Robert L. Saxton of Alliance Gaming, +1-702-270-7600.
ALLIANCE GAMING CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
2002 2001(a)
(In 000's, except per share amounts)
Revenues $154,832 $138,469
Cost of operations 87,538 86,307
Selling, general and administrative
expenses 30,292 25,419
Research and development costs 4,227 3,553
Depreciation and amortization 8,070 7,048
Operating income 24,705 16,142
Net interest expense (6,538) (8,421)
Minority interest and other (1,366) (752)
Income before income taxes 16,801 6,969
Income tax provision (902) (149)
Net income $15,899 $6,820
Diluted earnings per share $0.32 $0.16
Weighted average common and common
share equivalents outstanding 49,570 43,260
Memo: EBITDA 32,775 23,190
(a) Share and per share amounts for the prior comparative period have been
adjustedto reflect the 2-for-1 stock split which became effective
August 21, 2001 and the 2-for-1 stock split which became effective
April 9, 2002.
ALLIANCE GAMING CORPORATION
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended
March 31,
2002 2001(a)
(In 000's, except per share amounts)
Revenues $435,097 $387,923
Cost of operations 253,526 240,743
Selling, general and administrative
expenses 86,769 72,313
Research and development costs 11,726 10,217
Depreciation and amortization 23,110 20,219
Operating income 59,966 44,431
Net interest expense (20,454) (25,944)
Minority interest and other (2,246) (1,932)
Income before income taxes 37,266 16,555
Income tax provision (1,123) (861)
Net income $36,143 $15,694
Diluted earnings per share $0.77 $0.38
Weighted average common and common
share equivalents outstanding 46,904 41,696
Memo: EBITDA 83,076 64,650
(a) Share and per share amounts for the prior comparative period have been
adjustedto reflect the 2-for-1 stock split which became effective
August 21, 2001 and the 2-for-1 stock split which became effective
April 9, 2002.
ALLIANCE GAMING CORPORATION
SELECTED BALANCE SHEET DATA
As of
March 31, June 30,
2002 2001
(In 000's)
Cash and cash equivalents $48,982 $54,845
Working capital 127,614 112,669
Total assets 434,171 380,197
Total long term debt,
including current maturities 343,189 340,100
Total stockholders' equity (deficiency) 4,952 (39,205)
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SOURCE Alliance Gaming Corporation
CONTACT: Investor and Media, Robert L. Saxton of Alliance Gaming, +1-702-270-7600
Copyright © 2002, PR Newswire
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